Posts Tagged ‘IBM FlashSystem 900’

IBM 3Q17 Results Break Consecutive Quarters Losing Streak

November 2, 2017

DancingDinosaur generally does not follow the daily gyrations of IBM’s stock, assuming that readers like you are not really active investors in the company’s stock. That is not to say, however, that you don’t have an important, even critical interest in the company’s fortunes.  As users of Z or Power systems, you want to know that IBM has the means to continue to invest in and advance your preferred platform.  And a 20+ consecutive quarters losing streak doesn’t exactly inspire confidence.

What is interesting about IBM’s latest 3Q17 financials, which ends the string of consecutive revenue losses, is the performance of the Z and storage, two things most of us are concerned with.

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Here is what Martin Schroeter, IBM Senior Vice President and Chief Financial Officer said to the investment analysts he briefs: In Systems, we had strong growth driven by the third consecutive quarter of growth in storage, and a solid launch of our new z14 mainframe, now just called Z, which was available for the last two weeks of the quarter.

DancingDinosaur has followed the mainframe for several decades at least, and the introduction of a new mainframe always boosts revenue for the next quarter or two. The advantages were apparent on Day 1 when the machine was introduced. As DancingDinosaur wrote: You get this encryption automatically, virtually for free. IBM insists it will deliver the z14 at the same price/performance of the z13 or less. The encryption is built into the cost of silicon out of the box.

A few months later IBM introduced a new LinuxOne mainframe, the Emperor II. The new LinuxOne doesn’t yet offer pervasive encryption but provides Secure Service Containers. As it was described here at that time: Through the Secure Service Container data can be protected against internal threats at the system level even from users with elevated credentials or hackers who obtain a user’s credentials, as well as external threats.

Software developers will benefit by not having to create proprietary dependencies in their code to take advantage of these security capabilities. An application only needs to be put into a Docker container for Secure Service Container deployment. The application can be managed using the Docker and Kubernetes tools that are included to make Secure Service Container environments easy to deploy and use. Again, it will likely take a few quarters for LinuxONE shops and other Linux shops to seek out the Emperor II and Secure Service Containers.

Similarly, in recent weeks, IBM has been bolstering its storage offerings. As Schroeter noted, storage, including Spectrum storage and Flash, have been experiencing a few positive quarters and new products should help to continue that momentum. For example, products like IBM Spectrum Protect Plus promises to make data protection available in as little as one hour.

Or the IBM FlashSystem 900, introduced at the end of October promises to deliver efficient, ultra dense flash with CAPEX and OPEX savings due to 3x more capacity in a 2U enclosure. It also offers to maximize efficiency using inline data compression with no application performance impact as it achieves consistent 95 microsecond response times.

But probably the best 3Q news came from the continuing traction IBM’s strategic imperatives are gaining. Here these imperatives—cloud, security, cognitive computing—continue to make a serious contribution to IBM revenue. Third-quarter cloud revenues increased 20 percent to $4.1 billion.  Cloud revenue over the last 12 months was $15.8 billion, including $8.8 billion delivered as-a-service and $7.0 billion for hardware, software and services to enable IBM clients to implement comprehensive cloud solutions.  The annual exit run rate for as-a-service revenue increased to $9.4 billion from $7.5 billion in the third quarter of 2016.  In the quarter, revenues from analytics increased 5 percent.  Revenues from mobile increased 7 percent and revenues from security increased 51 percent. Added Schroeter: Revenue from our strategic imperatives over the last 12 months was also up 10% to $34.9 billion, and now represents 45% of IBM.

OK, so IBM is no longer a $100 + billion company and hasn’t been for some time. Maybe in a few years if blockchain and the strategic imperatives continue to grow and quantum catches fire it may be back over the $100 billion mark, but not sure how much it matters.

DancingDinosaur is Alan Radding, a veteran information technology analyst, writer, and ghost-writer. Please follow DancingDinosaur on Twitter, @mainframeblog. See more of his IT writing at technologywriter.com and here.


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